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The IRS treats as compensation any amount properly shown in Box 1 of Form W-2. This needs to be entered as a W-2. See IRS Publication 590-A for more information.
Stipends are taxable, even if not reported on a W-2. But it's a common misunderstanding thinking they're not, because there is frequently no tax form (W-2 or 1099) issued. It would be taxable even without a W-2 or 1099.
Wages and stipends paid to a student by their university are not subject to FICA (social security and medicare) tax. Boxes 4& 6, on the W-2 should be blank (or 0).
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